Peer loans ‘ no bank risk’

AUS­TRALIANS could be bor­row­ing an es­ti­mated $ 22 bil­lion from each other rather than banks within five years, but ex­perts say the rise of peerto- peer lend­ing shouldn’t bother the coun­try’s ma­jor banks.

Morn­ingstar head of fi­nan­cials, David El­lis says the big four banks – the Com­mon­wealth, ANZ, West­pac and Na­tional Aus­tralia Bank – will be able to with­stand the rise of the nascent sec­tor with­out much fuss.

That’s de­spite in­vest­ment bank Mor­gan Stan­ley’s pre­dic­tion peer- topeer lenders could ac­count for 6 per cent of per­sonal loans and 12 per cent of small busi­ness loans by 2020.

He says while peer- to- peer lenders are tar­get­ing the low hang­ing fruit – un­se­cured loans, where in­ter­est rates can be ex­or­bi­tant – the banks’ bread and but­ter of mort­gages and higher level busi­ness lend­ing wasn’t threat­ened. “I can’t re­ally see it re­ally mak­ing any in­roads into lend­ing that’s more com­plex and where there’s a se­cu­rity in­volved,” he said.